1/14/12

Oh people, you just gotta have this Murdoch guy on your Twitter stream.But be sure to take a screenshot of everything he publishes because he's darned quick about deleting his stuff sometimes, for example this tweet this afternoon, Sat Jan 14th:

Here's how the chart that tracks the gold ETF (GLD) for gold proxy, the silver ETF (SLV) for silver proxy, the miner ETF (GDX) the junior ETF (GDXJ) and copper miners' ETF (COPX) to give an idea of base metallers' performance looks over the last week in trading:

The industrials did the best by moving up nearly 5%, not surprising on the back of that tasty move in copper we noted yesterday. Then the juniors a tad under 3%, silver a tad under 2%, then Gold and the producer miners around that 1% point.

Overall, last week was a healthy enough one for the metals sectors.

1/13/12

A one hit wonder band from Ireland that had a lot going for them (signed with U2's label, produced by Dave Stewart of Eurythmics) and should have made it much bigger than they did, but the mysteries of the music world saw that they didn't. For some reason this song popped into my head last week and as I last heard it 21 years ago, that's alone was an interesting thing to reflect upon (for me at least).

No 'B', it doesn't. Check out these charts, dude. This first one shows the quarterly recovery rates posted by FR.to in 2010 and 2011 and to put it simply, they've always sucked but recently they've been getting worse. However, the tonnage throughput expansions at the company hide this fact because nobody gives a damn about efficiency when the bright shiny production numbers keep going up, right?

This second chart is a bit busier, but it's readable enough. It shows the breakdown of recovery rates at the three FR.to mining operations (i.e. La Encantada, La Parrilla and San Martin) and also throws in the consolidated average again to give reference.

So by staring at this, it's clear that La Encantada is the drag on recovery percentages. That mine ran at a pitiful 44% in 3q11 and we're estimating (by the global recovery average that was announced early today) that La Encantada will return the same type of number in 4q11 too.

And the real problem is illustrated in this final chart, that shows just how much of overall production at FR.to comes from La Encantada. In 3q11 it supplied 66.23% of all silver ounces and we're guesstimating the same type of number from 4q11 too.

Ladies and gentlemen, La Encantada is seriously underachieving on its recovery levels. But dammit, this is the golden boy of all silver mining ops right now! This is First Majestic! How dare a pissant upstart lil blogger criticize a stock like this?

You're right, I shouldn't touch the wondrous FR.to with my filthy, rotten, ill-wrought words. So instead I'll quote directly from the FR.to 3q11 MD&A and leave it at that:

"Under ideal conditions with the revised mix of fresh ore and tailings [in 4q11], this plant [La Encantada] should be able to achieve 60% recovery rates"

Every so often your humble scribe checks the back office stats thingies of IKN and today was one of those days. One of the features of the stat counter is one that logs the keywords people are using to get to the blerg from Google, Yahoo, Bing etc.

What I found today was that in the last 24 hours, 27 people had used "NSRS.ob", 12 people "NSRS scam" and the one that makes make cringe the most, six people with exactly the same question line, "Is NSRS.ob a scam?" and another four with "Is NSRS a scam?"

So to answer your question nice and clearly, yes, North Springs Resources (NSRS.ob) is indeed a scam and if you don't know that without a shadow of a doubt you really and I mean REALLY shouldn't be trading or investing in mining companies of any sort, let alone juniors and let alone exploration tripe on the US OTC market. Do not go near NSRS, people. Run miles, because if you don't all the money you put into it will end up in the back pockets of the people running its illegal and immoral pump and dump exercise.

Here's an unusual thing. Normally in Peru a newly minted Prez will have his honeymoon ratings for the first couple of months, but once the rot starts the approval figures go directly into free-fall and bottom out at 20% (Garcia) or lower (Toledo). So thenumbers out of Peru's pollster Datum todayare cause for an eyebrow to be raised:

The 50% overall approval for Ollanta Humala as collected in the survey of 1204 people between Jan 5th and Jan 8th still isn't the knockout numbers enjoyed by Santos in Colombia or Correa in Ecuador, but in context it's not bad and does represent a two point rise from the same polling company's same survey in December.

Just to add a detail, the top three reasons given by those that approve of his work are that he's keeping his promises, he's maintaining economic stability and he's implementing his State pension scheme for all those over 65 years old.

UPDATE:Twitterpal Klichstig notes that in 2006, Alan Twobreakfasts García got a one point pop-ette in November (pollster Apoyo) after polling downwards post-honeymoon. It turned out to be the anomaly as after that, things went seriously downhill ratings-wise. Fair enough and one poll doesn't make for a trend, so let's see what Datum turns up in Feb and March before jumping to conclusions. Gracias, Klichstig

1/11/12

The following appeared in IKN140 for subscribers last Sunday (Jan 8th) as an article in the 'Regional Politics' section of The IKN Weekly and is a look at the upcoming Presidential election in Venezuela strictly from the point of view of a trader looking for a potential trade on the country. It's a story we're going to be following fairly closely through 2012 in the weekly, probably as from February or March when the race gets official and the campaigning starts for real. Last Sunday we set the scene for subscribers and that's what happens here today.

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Venezuela’s 2012 Presidential election and potential trading opportunities arising
Here’s a country that doesn’t get much feature in our coverage at The IKN Weekly, for the basic reason that it’s the worst place in The Americas to have junior mining exposure. However, we offer up a segment in this week’s ‘Regional Politics’ because for those of you with a penchant for risk, there may be coin to be made from the country this year.

The basic scenario is that on October 7th Venezuela holds its Presidential election to decide whether Hugo Chávez continues as President or whether the person chosen as his contender gets the job. We can expect the Chávez campaign to get into gear in February (he’s already announced he’ll go into full re-election mode as from February 4th) and in the same month, on February 12th to be exact, the opposition alliance known as “Mesa de Unidad Democratica” or “MUD” (that’s an acronym that should stick in your brain) will choose which of the heads of the parties that make up the alliance will face off against Chávez.

As for the opposition choice, there are five names being put forward at the moment, with the top two (the winner likely to come from one of these) being Henrique Capriles Radonski, current governor of the State of Miranda and Pablo Pérez Álvarez, current governor of the State of Zulia. Also in with a shout is Leopoldo López, as although Venezuela’s courts have ruled that he is ineligible to run, the Interamerican Court of Human Rights (CIDH) has ruled that he can (though it’s doubtful Venezuela will listen). Others with outsider’s chances in the opposition primary are María Corina Machado Parisca and Pablo Medina.

So in other words, for about six months of 2012 until the beginning of October with the race hotting up as we get closer to the finish line we’re going to have a pretty easily understood, straight race between Chávez in the Left corner and one of those five (I’d put my money on Capriles Radonski with a saver bet on Pérez) in the Right corner. So with the scene set, here are the points I wanted to make today:

• I think Chávez wins. Not only is his PSUV party a real heavyweight, well oiled (literally) political machine that is certain to run a strong campaign, but when push comes to shove he still has the approval or at least the non-disapproval of a big segment of Venezuelan society (after all these years, too). Added to this are the doubts that must be expressed about the unity of the anti-Chávez opposition, as the MUD alliance is made up of parties and factions that have a history of fighting amongst themselves. If the MUD alliance starts to fracture when the going gets tough, the unlikely will become the impossible.

• However, it’s not going to be a walkover for Chávez and my best guess (along with the guesses of the handful of people who know Venezuela better than your author that I’ve exchanged, discussed and conversed with in recent weeks on this matter) is that there may well be occasions when the opposition candidate gets upwards momentum and begins to look good in the polls (whether those polls be biased for or against, because both pro and anti Chávez trickery from pollsters for him and against him is a guarantee in this campaign).

• This is where the investment opportunity lies, because if it looks as though Chávez is in trouble during the campaign and enough people begin to think that the opposition candidate can win,Venezuelan exposed financial devices of all shapes and forms are likely to rally, and rally hard. Here at The IKN Weekly first thoughts always turn to junior mining companies, so issues such as Rusoro (RML.v) or Gold Reserve (GRZ) (GRZ.to) or perhaps even a tiny explorer that prefers to hide its exposure to Venezuela at the moment such as Valgold (VAL.v) with a tiny market cap of around $5m, but perhaps the real place to play any politically-charged move in Venezuela financial devices are its sovereign bonds being as they are highly liquid, they move decent amounts of money and are, financially speaking, the best way to get in and out of the country quickly and easily.

• But it’s not all that easy (it never is). For one thing, the opposition rally and “serious move” might not occur (though I and many others think it will). For another, getting the timing right on an entry point may turn out to be fiendishly difficult, as although I’ve pondered this question for these last few weeks (and polled on it too) it’s really tough to say exactly when we could see said opposition rally along the timeline of this 2012 campaign. Perhaps it’s March, perhaps later in May or June. Perhaps they’ll leave it til later on. Or perhaps there’ll be several occasions when the opposition looks in a stronger than expected position in the polls (be they rigged or unrigged). Also, timing the exit of any paper-successful trade will be tough too, as if you hang in there a little too long profits could be vaporized very quickly, or you sell too early and take a small profit, only to see the opposition surge a little more and serious money left on the table.

In other words, what’s being outlined here is a risk trade. Not only that, it’s clearly not for those who like to buy and forget, because you’ll need to be pretty vigilant at the screen all the time on any Venezuela political risk trade. I’d really like to be able to get more specific on a possible timeline too, but it’s going to be too much of a flux to predict matters at this early stage. However, there does seem to be a set-up for interesting, volatile and potentially very profitable trading on the Venezuela 2012 elections starting to form. This initial headsup comes in January because I wanted to set the scene for the year before those February dates come up and the campaign starts hotting up. Rest assured this won’t be the last you hear of Venezuela political risk (as concerns trading in particular) in The IKN Weekly as the year unfolds.

And once you've digested that topline, here's how the article begins. Make sure you click thru for the rest.

LAS VEGAS—RealTouch wants to bring teledildonics to Afghanistan. Company manager Scott Rinaldo, appearing at a CES party sponsored by porn firm Pink Visual, said he's working on distributing "a thousand dildos for the military wives"—in this case, Internet-connected sex toys that can let families thousands of miles apart get intimate.

St Elias Mines (SLI.v) has always had "a certain odour" about it and although it's a stock that's never been mentioned on these pages, at least a dozen mailers can testify to your author's "avoid hell yeah just avoid" call on SLI.v over time. So let's check out the trading pattern over the last 10 days over at SLI.v.

This is a stock that has a trading average of less than 200k shares per day (with a lot of that volume bolstered by either very pumpy or very dumpy days). So suddenly, over the last three days of market we saw large lumps willing to sell at any price available and a stock that's been trading at-or-around $2 for a long time indeed closed at $1.42 yesterday.

Then after the bell last night this pearl of a NR hit the wireswhich basically talked of SLI.v not finding the massive intersects of wonder mineral that had been rumoured and whispered for so long. Instead we get 30cm or 50cm skinny veins at depth which wouldn't be economic with gold at $5k/oz. The result is an SLI.v down 49% right now on very heavy volume (update: now 54% down on 1.3m shares traded...ouch)

So the basic question is: Who tipped off who about these results? Quantec? The drillers? The SLI.v management? I'm sure it'd be great fun to find out exactly who was selling and what kind of family/friends relationship they have with those close to the sensitive information since last Friday, but sadly we're talking about Canadian capital markets and not one that has a decent reputable regulatory body. The scumballs will continue scumming and the stuffed suits in Vancouver and Toronto who are supposed to keep things above board will do their normal bugger all about it.

UPDATE Thursday: welcome Stockhouse bullboard readers. I adore how some of you guys think that two directors resigning this morning, including the arch-scummy Bain, can be bullish news for SLI.v. Retail, the crop that never fails...

Dundee is smarter than the average* brokerage and today is quicker off the mark than the average* Canadian house in identifying an interesting early-stage junior.This is the link that'll take you to the PDF report on Lupaka Gold Corp (LPK.to) and it's worth a read, too. Here's how the note starts and for full disclosure, your author is long this stock and it's also one we've pointed to in The IKN Weekly. Take it away, Dale Mah of Dundee:

Building Ounces Through Discovery

We are adding Lupaka Gold to our Mineral Exploration Watch List. Lupaka Gold currently trades at an Enterprise Value (EV) of approximately $42/oz based on its current 60% ownership of the 1.2 million ounce Crucero Gold Project in Peru. Since the initial NI43-101 compliant resource was completed in February 2011, the company has drilled over 7,000 metres and has expanded the mineralized envelope along strike and at depth. In our opinion, drill results indicate potential growth of 40% bringing the size of the A-1 zone to approximately 1.6 million ounces which remains open to the north and at depth.

Looking For Another A-1

The Crucero Project is located high up in the Peruvian Andes and to advance the project, Lupaka must be successful in establishing a multi-million ounce gold resource. The extent of mineralization of the main A-1 zone requires additional drilling but from the information available, the total size is not likely to exceed 1.8 million ounces. Fortunately, Crucero contains an additional ten anomalies (A-2 to A-11), many of which are similar in size and share geochemical and geophysical signatures as A-1.

A Robust Resource, Almost 1 g/t at the Lowest Cut-OffDrilling to date has established several higher grade sections in excess of 9 g/t. Typical open pit resources use a lower cut-off grade of 0.3 g/t which increases tonnage but lowers overall grade. The A-1 resource inventory shows 760,000 ounces at 1.6 g/t using a 1.0 g/t cut-off. Even at the lowest 0.25 g/t cut-off, A-1 contains 1.3 million ounces of gold grading 0.94 g/t.

1/10/12

I've had a lovely day away from the office, so good in fact that I think I'll do it again mañana. Meanwhile, on watching the New Hampshire results come in this caught my eye as a list of crunchy goodness: The Top twenty contributors to the Mitt Romney campaign.

And before you think I'm getting partisan US politik on you, I'm not. The stated IKN position is that as long as one of the total nutjobs doesn't get the job (and most are dropping (Perry) or have dropped (Bachmann) away fast already) I don't give a flying fig if Obama gets back in or a GOP wins the thing.

1) My daughter got a Sony Walkman MP3/MP4 player for her birthday over the weekend (8Gb too, lucky girl), so technologically challenged father and said lady are now going to sit down and work out just how this confoundedly small machine works (my Walkman ran on TDK tape cassettes, which seems like a loooong time ago now) and how you can get the maximum amount of Foo Fighters loaded into its memory.

2) Then I'm going out for lunch.

As the market looks like it's on rails today I highly doubt it will miss my presence. In other words, light posting on IKN today.

1/9/12

Your humble scribe read with interest this article in Global Post today about the rise and expansion of the gold mining industry in Nicaragua. A recommended read, it starts like this (but click through on the link because there's plenty more):

LA LIBERTAD, Nicaragua — Explosions ring out near La Libertad, an area that was the scene of fierce combat during Nicaragua’s civil war in the 1980s.
But these days, the blasts come not from guerrilla fighters but from prospectors searching for gold. Record prices for gold have led to an influx of foreign investors and the reactivation of Nicaragua’s long-dormant mining industry. Annual gold production has more than doubled in just the past three years. Gold is now the country’s No. 3 export and has helped Nicaragua post the highest economic growth rate in Central America.continues here

IKN back. One of the things we do in the subscription IKN Weekly every quarter is run a check on the regional risk for mining in LatAm countries. It's done on an ongoing basis and we score (and adjust the scoring of) the countries covered. In the last couple of years, the major upmoves have been seen by Colombia and, yes you guessed it, Nicaragua on our list. The Colombia story is well-known (and somewhat overhyped) but the rise and acceptance of gold mining in Nicaragua isn't such a widely known story. Here's how we've covered Nicaragua in the last three editions of the quarterly "Regional Risk Update" over at The IKN Weekly.

From IKN 112, dated June 26th 2011

Nicaragua: Political stability is up one point. The electioneering for the upcoming Presidential vote is now getting into full swing, current incumbent Daniel Ortega is leading the field and, even if you’re not keen on him (I’m not) or his left-wing political stance (I don’t care), there’s no doubting that his government of the last few years has been supportive of exploration, mining production and FDI inflows into the mining sector. Since our first review in IKN32 back in December 2009 Nicaragua has climbed by five points, each one well-deserved. This country is an unsung, underrated pocket of clear miner-friendliness in the CenAm region.

From IKN 123, dated September 11th 2011

Nicaragua: Unchanged. We are moving ever closer to the November 6th general election, but so far at least things on the campaign trail have been relatively smooth. Of course, the term “relatively smooth” may mean something quite different in a place like Switzerland and a Central American state with a history of volatility and violence so greater context is required from the reader, but overall the election seems to be going off without major incidents and that can only be a good thing for the present and future of the country. Mining exports have become an important part of the country’s economic mix and President Ortega (current favourite to get re-elected in November despite doubts over whether his candidacy is legal) may be many things but he’s not stupid, so mining activity is getting his government’s full support. We like Nica as a destination for exploration juniors and it’s certainly the best place in Central America to do mining business today.

From IKN137, dated December 18th 2011

Nicaragua: Political Stability up one point. The Presidential elections came and went and, apart from some suspicion of some ballot stuffing from the Ortega side, it’s clear who won the vote and would have won it anyway. Daniel Ortega isn’t my cup of tea on many levels, but he’s been good to the mining industry in Nicaragua and we’d expect that to continue in his second term. Thus the country gets a point added to its total and is now best of the rest outside our five preferred green-for-go countries. If you’re in B2Gold (BTO.to) or any of the early stage companies digging in Nica, you’re not in bad shape.

So yes indeed, it's good to see Global Post picking up on the pro-mining developments in Nicaragua. After all, we don't want to be the only people that recognize a good thing when we see it, do we? dyodd.

Just announced, Brazil's new wunderkind Neymar got this goal voted as the best of the year, 2011.

And quite right, too. It's the best goal I've seen in the last five years, let alone one. The first pass gives you the view of the movement and awareness he had, but watch the replay on that youtube above to really appreciate the close control.

PS: And yeah, Leo Messi won the player of the year award again. No surprises on that one.

Since December 13th, the head honcho at Gold Group has added 216,000 shares of the group's mothership, Radius Gold (RDU.v), to his pile (he now owns a tad over 1.25m shares) and he did it by buying in the 20s and all on the open market, too. He probably thinks the stock is cheap here, no?

The bottom line; not mindblowing wonder-numbers, but perfectly acceptable and with metals where they were for 4q11, Minefinders (MFN) (MFL.to) is bound to post another decent set of financials on said production. The stock has been under pressure recently and is probably good for a bounce on these (which is why I'm long the stock right now, by the way, so dyodd dude).

I'm taking a bit of a flyer on this one because even though the kind gentleman, reader MM, who normally sends over the link to the Don Coxe ConfCall says it's "a great one" I just don't have the time to dedicate to listening to it today (both professional and family reasons). But as MM is a person of gaspingly good taste and discernment I think we can safely offer it to other esteemed readers of IKN.

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